Memorandum of Conversation, by the Secretary of State

The British Ambassador came in at his own request. He said that he desired to make some further reference to the proposed safety zone around this hemisphere; that this would include the problem of how German merchant vessels, some eighty in number, now in American harbors, would be dealt with; that his Government would be averse to the sale of these vessels, for the reason, among others, that it would give the German Government a large amount of exchange to use abroad for all sorts of undesirable purposes. He then raised the question of transfer under legal requirements and asked whether it could be made legally. I did not go into details on this matter but threw out the tentative comment, which I described as tentative, to the effect that there would be serious difficulties in any event in carrying through a [Page 70] completed legal transaction for the sale and transfer of these German vessels to other governments or individuals, and especially governments. I indicated to him that I would take the matter up further and acquaint him with any final impressions I might have. He then said that the effect of any policy of taking over these vessels in Pan American ports would be bad on other neutrals in whose ports German vessels in large numbers are now anchored, such as in the case of Holland. Germany, he said, could easily put pressure on Holland to do her wishes if such a policy of transfer should be adopted in Pan America. I stated to the Ambassador, in reply to a general remark of his, that there were no particularly new developments in the scope and nature of the proposed safety zone more than I had set forth in our previous conversation. I then repeated the substance of what I had said to the press within the last two days on this subject.

C[ordell] H[ull]